On
the 27th, I, together with Ambassador Kurusu, called on the President. (Secretary
Hull was also present.) The resume of our talks follows:

President:
"In the last Great War, Japan and the United States were together on the
side of the Allies. At that time, both Japan and the United States were given
ample proof that Germany failed to comprehend the way the people of other
countries think.

"Since
these conversations were begun, I am aware of the fact that much effort has
been made by the Japanese side, too, by those who cherish peace. I am highly
appreciative of this fact. It is clear that the majority of the American people
are anxious to maintain peaceful relations with Japan. I am one of those who
still harbors much hope that Japanese-U. S. relations will be settled
peacefully."

I:
"Your recent proposal will no doubt be the cause of painful disappointment
to the Japanese Government."

The
President: "To tell you the truth, I, too, am very disappointed that the
situation has developed in the manner that it has. However, during the several months
that these conversations were being conducted, cold water was poured on them
when Japan occupied southern French Indo-China. According to recent
intelligences, there are fears that a second cold water dousing may become an
actuality." (He apparently meant the increase in our troops to French
Indo-China and our occupation of Thai.) (See my message #1205*.) "I fully
understand that the general public in Japan who has been living in war
conditions for the past year, cannot see a parallel with conditions in the
United States, which is living under peaceful conditions.

"During
all of the time, however, that Your Excellency and Secretary Hull have been
conversing, we have never heard of or seen concrete proof of any peaceful
intention by the leading elements of Japan. This has made these talks an
exceedingly difficult undertaking.

(Part 2)

"Even
the suggestion that the present situation be overcome by a 'modus vivendi'
would be without any value if in the final analysis the basic principles of
international relations of Japan and the United States do not agree. If there
is a basic difference, no stop gap measure could carry any weight, it seems to
me.

"In
my conversations with Churchill on the high seas, for example, it was
predetermined that our respective basic policies coincided. Moreover, even the
subjects which were to be agreed upon had been clearly defined in
advance."

Kurusu:
"Judging from the records of the developments of our negotiations in the
past, the differences of opinions between Japan and the United States were not
differences in the basic principles of each. Rather, the differences arose in
the practical applications thereof. For a very simple example Japan has no
disagreements to the principle of non-discriminatory treatment of commerce,
strongly advocated by the United States.

"However,
it is when we consider the immediate application of this principle in China,
bringing about a radical and sudden change in the economic situation there, it
is only natural that Japan insists upon certain special conditions. I feel that
this difference may have been the source of some misunderstanding."

Hull:
"By your frequent explanations, we thoroughly understand point. According
to advice I have received, however, there are approximately 250,000 Japanese
merchants in China at present who followed or accompanied the military. These
are engaging in various business enterprises. There have been indications that
various incidents have arisen involving the relations between these merchants and
nationals of a third country. If you are going to consider the profits of these
people, the problem of course will become an exceedingly difficult one."

Kurusu:
"Japan's claims are not based on such minor factors, but concern only the
various major problems."

(Part 3)

We
then went on and brought up the subject which has reference to the President's
"suggestions".

The
President: "have not abandoned giving consideration to that matter.
However, it is first essential that both Japan and China simultaneously desire
that that be done."

We
pointed out that from a practical standpoint that would be very difficult to
accomplish. To this, the President said:

"In
domestic issues, I have had several experiences along the same lines. No doubt,
some method will be found in this case, too."

I.
"We have, as yet, received no instructions from Tokyo regarding your
proposal. I, for one, hope that you, Mr. President, whose statesmanship I
respect highly after over thirty years of close acquaintance with it, will find
some way that will lead to a settlement."

The
President: "To tell you the truth, I have since the end of last week,
twice postponed a trip which I was going to take for my health, because of a
critical domestic issue, and because of the arrival of Ambassador Kurusu to the
United States. I am leaving tomorrow afternoon, Friday, for the country for a
rest." (He looked very tired). "I plan to return next Wednesday. I
would like to talk with you again then. It would be very gratifying, however,
if some means of a settlement could be discovered in the meantime.

(Part
4 not available.)

25495

JD-1: 6915(D) Navy Trans. 11-29-41 (X)

*Not available.

(EXHIBITS
OF JOINT COMMITTEE , EXHIBIT NO. 1 INTERCEPTED DIPLOMATIC MESSAGES SENT BY THE
JAPANESE GOVERNMENT BETWEEN JULY l AND DECEMBER 8, 1941)